[Jason]

I was thinking of switching my entire holding in my roth ira to QQQ currently it is mainly VOO for the potential higher returns.

Given the differences in sector exposure and historical performance, would this be a wise move for long-term growth?

What factors should I consider before making this decision?

Fyi I am in my late 30s

[Joel]

Could work, could backfire.
Why do want to invest in the Nasdaq 100?

It’s just a stock exchange….

[Amar]

Why not do future investments into QQQ and leave what’s already invested alone

[Ernest]

Not a popular move here – but I’d do it. Lot’s of folks replying, think that everybody’s risk tolerance, time frame, asset allocation, etc. –

should be the same as theirs (people answering).

They can’t fathom that other (like the op) – have different goals.

[Brandon]

We are all in on VGT and QQQM (same fund as QQQ but .05% cheaper!) and have been early retired for 5+ years.

At your age, I’d totally trust yourself on that choice and know that if you stick with VOO you’d be very happy long term as well.

[Bill]

I remember thinking that the nasdaq was the future and they didn’t have to just stick with the 500 biggest companies.

That was right before the dot com bust. Oops.

There is a lot of risk in trying to pick winning sectors.

[Charles]

Like many said, chasing past returns doesn’t mean future out performance.

Actually, the contrary. Historically it has shown that over performance and high PEs increases risk and potential underperformance in subsequent time periods.

The NASDAQ 100 is currently a little over 30 P/E when it normally is in the range of 18-28 (median ~20).

Of course this is just an empirical perspective (I’m sure there are contrarian viewpoints, and viewpoints that dismiss valuations all together). Nobody knows.

Just the probability isn’t as favorable imo.

The efficient frontier can morph over time. Sometimes risk doesn’t mean higher returns.

[Shah]

This idea is all about chasing recent past returns which is hazardous to an individual’s wealth and pursuit of wealth

[Rick]

I won’t agree with the specifics as no one knows how it will work out for you. But I do appreciate the aggressive decision.

Similar decisions have been far more winners than losers for me.
Here are a few over the last 5 years.

Airlines would be prohibited from flying people
Oil goes negative per barrel

Mag7 (before that name existed) would be down 40-70%
Multiple banks would evaporate in under three weeks

Mid and long term bonds would free fall (and no one would sue and no class action lawsuits would come from their use as a “safe” asset class) along with stocks

Political lunacy would create intense selling pressure on the very electric vehicle company they loved just 1-2 years prior

Yes, I have always known be greedy when others are fearful but adding be greedy when other are acting very low IQ…that was new to me.

But also, intensely profitable in the long run as I bought and held riding out the time it takes to heal the brains broken by the event.

You may experience the same. But it is not a given.

[Brian]

What if VOO has higher returns over the next 1, 5, 10 years, will you switch your entire holding back?

[Christopher]

The approach here is interesting – instead of holding 500 companies, 499 of which won’t be the top performing stock, just hold 100. Since diversification is a drag on returns, this can make sense.

But you can do better. Even with QQQ, 99 of those 100 stocks won’t be the top performing stock in that index.

Might as well go All The Way and buy the top company, and ditch the rest and their inferior returns.

[Scott]

I’ve no idea on whether now is the time to shift back to growth stocks.
If you do…I’d look at funds that don’t limit themselves to one exchange like QQQ.

Maybe that made sense 20 years ago but it’s really not a criteria anyone uses to select stocks.

[Tristan]

Qqqm has a little lower expense ratio, same funds, weighted a little different but significantly….. not saying you should or shouldn’t.

Depends on risk tolerance and goals.

Have owned both at different times and not be mad when I owned them, but doesn’t mean I always want them haha

[Mark]

Could potentially get higher returns. Could potential get lower returns. This only works when u compare like funds.

Ur comparing apples to oranges. Growth vs blend. They track different indexes.

Understand the different between growth and value and understand why most ppl opt for a blend fund for 30+ yrs

[Eric]

diversify and go with some voo, vti, smh, qqq, xle, labu etc. then you won’t miss out on anything except crypto

[Author]

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